Economics

According to Eurostat, the European Union statistics agency, there was a 7.7 percent unemployment increase in Europe. This increase occurred in October 2008 amongst the 15 nations that share the Euro. This was the highest level of unemployment in a period of two years that was accompanied with a sharp drop in growth. As compared to a 3.2 percent sink of the annual inflation rate in October, the 2.1 rate in November culminated in the plunge of prices. With lower inflation rates, the European Central Bank reduces interest rates which encourage growth. In spring and summer of 2008, there was a shrink in growth particularly in the second and third quarters due to the global financial crisis. As a result, the Euro area went into a recession.  In real terms, this means job losses  lots of them and more to come (AP par, 3).

The EU statistics agency said that about 12 million people in the Euro area were jobless in October 2008. There was also a revised unemployment rate of up to 7.6 percent in September 2008. In all the 27 European Union states, 17 million people were jobless in October 2008. This is a 0.1 percent increase. With the labor market expected to be worse in 2009, according to the EUs executive commission, the rate of unemployment in Europe could rise up to 8.4 percent. At the end of 2007, the unemployment rate was 7 percent. Spain is leading in the unemployment rate with 12.8 percent. This is due to the bursting of a housing bubble and the effects of the global economic downturn on the tourism industry.

As the European Commission called on the EU governments to take measures that encourage growth, the rate of unemployment is expected to decrease. A decrease in the inflation rates could also decrease the unemployment rate in Europe.